Nikhil Yogi , Delhi V. DCIT Circle Int. Taxation-3(1)(1), Delhi

ITA 670/DEL/2022

AI Insights

The case involves Nikhil Yogi, a non-resident individual, who appealed against the order of the Commissioner of Income Tax (Appeals) -43, New Delhi, which confirmed the additions made by the Assessing Officer during the assessment year 2017-18. The additions were made following the discovery of substantial cash deposits in the assessee's Indian bank accounts, which were not satisfactorily explained. The assessee argued that these deposits were from cash withdrawals made from his savings account in the USA, which had already been taxed by the US authorities. However, both the Assessing Officer and the CIT(A) found the explanations and evidence provided by the assessee insufficient to establish a clear link between the withdrawals and the deposits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302677 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-04-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 11-04-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Additional evidence
• Section: 144; 143(3); 142(1); 133(6); 69A

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D”: NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA No. 670/Del/2022 Asstt. Year: 2017-18 O R D E R PER ASTHA CHANDRA, JM The appeal by the assessee is directed against the order dated 28.02.2022 of the Ld. Commissioner of Income Tax (Appeals)-43, New Delhi (“CIT(A)”) pertaining to Assessment Year (“AY”) 2017-18. 2. The assessee has taken the following grounds:- “01. Because the CIT(A) has failed to appreciate the facts of the assessee's case and has upheld the inadvertent additions made by the AO. 02. Because the CIT(A) did not appreciate the principle of natural justice and did not provide the assessee with reasonable opportunity to be heard despite knowing the fact that the assessee is a non-resident and has to travel to India for the appeal. Nikhil Yogi, 670, Block Gh-09, Paschim Vihar, New Delhi – 110 087 PAN ABQPY8641L Vs. DCIT, Circle- International Taxation-3(1)(1) New Delhi. (Appellant) (Respondent) Assessee by: None Department by: Shri Sanjay Kumar, Sr. DR Date of Hearing: 25.04.2023 Date of pronouncement: 10.07.2023 ITA No. 670/ Del/2022 2 03. Because the AO as well did not appreciate the principle of natural justice and did not provide the assessee with reasonable opportunity to be heard. 04. Because the CIT(A) has failed to appreciate the fact that the addition of Rs.53,88,380/- u/s.69A out of cash deposits made by the assessee was out of multiple cash withdrawals made by the assessee from his savings bank account maintained in the USA. 05. Because the entire cash deposit of Rs. 53,88,380/- was out of the assessee's savings in his bank account maintained with Bank of America in the U.S.A. and was duly taxed for to the Revenue Authorities in America. 06. Because the CIT(A) failed to appreciate the documentary evidences laid down before him proving that the cash deposit was out of the cash withdrawals and was explained and tax paid money. 07. Because the assessee has disclosed and explained the source and nature of cash withdrawals but the CIT( failed to acknowledge the same. 08. Because the CIT(A) upheld the erroneous addition made by the AO despite the fact that the AO failed to submit a remand report to the additional evidences filed by the assessee 09. Because the assessee is a Non-Resident because of which he was not able to represent his case adequate y before the CIT(A) and even before the AO. 10. Because in absence of proper facts and documents before the AO, the AO framed the assessment as per best of his judgment, the assessee be rewarded another opportunity to represent his case before the AO. 11. Because the CIT(A) failed to acknowledge the unlawful procedure followed by the AO while framing the assessment whereby the AO however framed the assessment order as per best of his judgment but still the assessment order was signed u/s. 143(3) and not u/s 144.” 3. The appeal was fixed for hearing on 04.10.2022, 05.12.2022, 16.02.2023 and 25.04.2023. None represented the assessee on all the above dates of hearing, though the Ld. CIT(DR) and /or Ld. Sr. DR were present on all the dates of hearing. We are therefore constrained to decide the appeal ex-parte. ITA No. 670/ Del/2022 3 4. We have heard the Ld. Sr. DR who attended the hearing on 25.04.2023 and perused the records. 5. The assessee is a non-resident individual. He filed his return of income on 01.02.2018 declaring total income of Rs. 8,77,600/-. His case was selected for limited scrutiny under CASS. During assessment proceedings, the Ld. Assessing Officer (“AO”) gathered information from the banks under section 133(6) of the Income Tax Act, 1961 (the “Act”) as per which the assessee had deposited cash of Rs. 42,50,380/- on various dates during the previous in IndusInd Bank, Punjabi Bagh West New Delhi and Rs. 11,38,000/- in Yes Bank Ltd., Meera Bagh, New Delhi aggregating to Rs. 53,88,380/-. The Ld. AO issued notice(s) under section 142(1) of the Act on 18.11.2019 and 28.11.2019 seeking compliance on 25.11.2019 and 05.12.2019 respectively but no compliance was made. Thereafter, the Ld. AO issued final show cause notice under section 142(1) on 09.12.2019 seeking compliance on or before 13.12.2019 which also remained uncomplied with. The Ld. AO therefore completed the assessment on 17.12.2019 under section 144 of the Act on total income of Rs. 62,65,980/- including therein addition of Rs. 53,88,380/- under section 69A of the Act. 6. Aggrieved, the assessee filed appeal before the Ld. CIT(A). During the appellate proceedings the assessee submitted additional evidence under Rule 46A of the Income Tax Rules, 1962. The Ld. CIT(A) obtained the Ld. AO’s report which he discussed in para 5.5 to 5.8 of his appellate order. For the sake of clarity, the same is reproduced below:- “5.5 ...... The AO vide report dated 23.12.2021 has mentioned that the assessment order was passed after affording the appellant ample opportunities hence Rule-46A is not applicable in the case of the appellant while commenting on the merits of the additional evidences AO has mentioned that the appellant in the course of appellate proceedings has submitted I. Bank statement for Nikhil Yogi., Veena Goel vinzant and Khushbu Mango! 2. Passport copies along with travel tips for Nikhil Yogi , veena Goel vinzant and Khushbu Mangal 3. Arrival dates and amount statement ITA No. 670/ Del/2022 4 5,6 The appellant has claimed that source of cash deposited in the year and consideration was savings In India and foreign currency got into India by him, his mother and his sister in the previous year on multiple occasions. A chart summarising the same containing details of withdrawals from bank accounts in different parts of the world and arrival & departure details has been given. The AO has mentioned that the appellant has purportedly withdrawn an amount less than $10,000 multiple times across a period of seven months at different locations arid brought in the same to India for father's treatment. Thereafter his father treatment was postponed and his father deposited the said cash in the bank. 5.7 The AO had made the following observations: 1. The cash deposits have been made on various dates in multiple branches across July and August 2015. No evidence has been provided by the appellant to corroborate /support the fact put forth in relation to deposit of cash. 2. Various transactions have happened between the appellant and the persons concerned across the years through the regular banking route there by indicating no apparent reason for cash deposit/Withdrawal to be resorted to. For instance the appellant has withdrawn cash amounting to. Rye 12. lacs in November 2015 on two dates purportedly for the purpose of his father’s treatment. However the appellant has also transferred Rs.5 lakh to his father through the bank account a few days later on 09.12,2015. Further appellant is often seen transferring money to his own account the money withdrawn in small amount across various months at various location could instead have been directly withdrawn for use in India, 5.8 The AO has therefore concluded that there is no link organic or otherwise between the dispersed and disaggregated withdrawals carried out in different places an one hand and equally dispersed and visibly unconnected cash deposits made in India on the other hand. Thus the Appellant has not been able to prove beyond reasonable doubt that the money withdrawn across seven months in different locations by different person is the same money that has been deposited ai stretch in his Indian bank account. The claims are evidently an afterthought and cannot be construed as sufficient explanation in respect of the cash deposit, So The appellant has failed to discharge the onus cast upon him and his claims are devoid of any merits. So the AO is of the opinion that since source of cash deposits remains unexplained therefore additional evidence is required to be rejected.” 7. The Ld. CIT(A) offered opportunity to the assessee to rebut the findings of the Ld. AO which the assessee reportedly failed to do. The Ld. CIT(A) therefore, confirmed the impugned addition by observing thus in para 5.9 of his appellate order: ITA No. 670/ Del/2022 5 “5.9 .............As no evidence has been provided by the appellant to corroborate or support the fact put forth in relation to deposit of US dollar in cash in their bank account like Bank receipt or foreign exchange conversion receipt to support his arguments. Therefore after careful consideration of the facts and the legal position I am of the view that the appellant has not been able to prove beyond reasonable doubt that the money deposited in bank account is the same foreign currency withdrawn in different parts of the world in last 7 months. So in view of these facts and circumstances as source of cash deposits remain unexplained so the addition made by the assessing officer is confirmed.” 8. In the absence of any material brought on record by the assessee before us justifying our intervention, we decline to interfere and reject the appeal of the assessee. 9. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 10 th July, 2023. sd/- sd/- (G.S. PANNU) (ASTHA CHANDRA) PRESIDENT JUDICIAL MEMBER Dated: 10/ 07/2023 Veena Copy forwarded to - 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr. PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr. PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order